Business Ethics 101

[DubStyle311]

It's really remarkable how much business schools focus on ethics and corporate social responsibility these days. I can say from first hand experience that in every single business class I took in my undergraduate career, part of the course discussed ethics. This was not just a coincidence. At my school, the administration made this a requirement for the teachers. Businesses and business people tend to get a very bad rap when it comes to these things because honestly, there are a lot of corporate scandals with scumbag people taking advantage of things. These days it is just as important for people to be prepared to face ethical dilemmas as it is they can read financial statements.

I was lucky enough to have some great teachers who really helped prepare me for these situations. One of my favorite lectures was about this stuff. Many people here and in liberal arts programs make the argument that the corporation is evil and inherently unethical because its sole reason for existing is to raise shareholder value. They cite examples such as Enron and Worldcom scandals where people made morally abhorrent decisions so their stock price could rise a few points. What the people who make that argument don't seem to understand is that unethical behavior is NOT in the corporations best interest. "Bad behavior, once found out, will ALWAYS lead to lower stock prices."

Everyone needs to understand that you will face these types of decisions once entering the work force. Bud Head even brought this up a few days ago in a post where he mentioned that financially he is being held back because he wont engage in the unethical practices other people in his field partake in. Situations come up where making the right decision will mean you make less money, advance slower, or even lose your job. What it comes down to is integrity. What is more valuable, that extra money in your pocket or your word as a man.

To sum up, I just want to let people know that ethics in business is a major focus of just about every good business school out there. I dont think that was the case 10 or 20 years ago. It's a vitally important part of schooling that is being addressed and I dont think that enough people know just how much training in business ethics that students get these days.

Originally Posted by The Philadelphia Inquirer

ETHICS 101

By Henry J. Holcomb


College business schools are taking a hard look at how they teach ethics, looking for ways to help graduates think and prevent future scandals and half-baked business experiments that backfire.

"Too many times the focus of ethics courses has been on not stealing pencils," said Joseph A. DiAngelo, dean of the Haub School of Business at St. Joseph's University.

The need for change is more complex than that.

"There are overarching business issues that business schools cannot ignore," said James M. Danko, dean of the Villanova School of Business.

Schools of all sizes are developing fresh ways to teach how to assess the impact of decisions on others and how to search for better alternatives.

St. Joseph's is weaving ethics into every business course and giving professors time and assistance to figure out how to do that effectively.

Villanova University's business school is merging some courses and having professors from two disciplines team-teach them. This, officials say they believe, will give students a more realistic view of how decisions get made and help them think more about consequences, near- and long-term.

"For ethics to be effective, you've got to understand how it applies in real situations, how it permeates everything," Danko said.

Gettysburg College, a small liberal-arts school, takes management students to the sewer-treatment plant. "I want students to see how even routine decisions have an impact on other people's interests. . . . Their jaws drop when they realize that our treated sewer water goes into the Potomac River and Washington's drinking water," said Daniel R. Gilbert Jr., a Gettysburg professor.

There is a sense of urgency as the nation reels from the hubris of banks collecting fees for bundling bad loans with good. Last month, federal authorities arrested 406 people on mortgage-related charges and accused two former Bear Stearns Cos. Inc. hedge fund managers of fraud.

"We're seeing a pervasive pattern of good people going bad. We want to put students in situations where they have to make decisions under pressure to succumb. We want them to experience how once you're on the slippery slope, it is hard to come back," said Jonathan P. Doh, director of the Center for Global Leadership at the Villanova School of Business.

New, more dynamic exercises are being developed to simulate - rather than just look at and discuss - decision-making. Rather than follow a script, students act out roles, responding in real time to what happens as the scenario plays out.

"We want students to experience what it will feel like when they are caught between a client and a partner who wants to keep the client happy. We want," Doh added, "to build the strength and competence of character to stand up to the client or executive. We need to teach them how to do it. . . . The only way is to make them feel the sweat and pressure."

There is a new emphasis on role-playing exercises and observations that simulate the reality of decision-making.

This is in contrast to the ethical case studies that have been around for years - on the Internet and in textbooks.

Some traditional case studies are based on situations in which people such as Enron Corp.'s Ken Lay went wrong at the expense of many. Others describe thorny situations involving sales, advertising, accounting, purchasing, what people are required to wear to work, getting friends to leak information, and ignoring safety warnings. Many have a script with lines for people to spark discussion.

This traditional approach often leads to "a vigorous discussion, with opinions bouncing around the room. But often no one walks out with a way to come to a conclusion," said Stephen J. Porth, associate business dean at St. Joseph's.

"Too many are focused on legal, not moral, answers," DiAngelo said.

Scandals spawn laws and rules, but there has been too little focus, professors say, on what led people onto the slippery slope. Examinations of ethical failures often find "that the people involved didn't see the whole picture" so they could think about consequences, Danko said.

Professors say teaching must go beyond knowing right from wrong. Students must develop the skills to participate in processes - involving many cultures and disciplines - that produce ethical behavior.

New initiatives seek to promote a more critical view of business.

"Maximizing shareholder value is a legitimate objective, but it has to be pursued within a moral context. . . . The singular pursuit of any objective can produce perverse results," said John J. McCall, professor of management and philosophy and director of St. Joseph's Pedro Arrupe Center for Business Ethics.

"We must teach that business is not primarily about making money. It is about providing goods and services that other people need. Businesses that are the most successful are the ones that pay attention to what they're doing and how they're doing it," McCall said.

These companies develop a corporate credo, and "they don't just hang it on the wall, they live it," McCall said.

Such businesses, he and others said, take a hard look at the sustainability of new ventures and avoid doing things that lead to laying off workers and leaving communities with debt from utilities and schools built to support plants that failed early.

The pressures for profit on corporations can crowd out critical thinking and block important information, said David M. LeVan, former chairman and chief executive officer of Conrail Inc., the Fortune 500 railroad. His concerns about ethics led to a $1.25 million gift to Gettysburg College to fund an ethics professorship - his first contribution after Conrail was taken over by rivals and broken up in 1999.

"I decided to do this based on observations, particularly after I became CEO," he said in his office of the Gettysburg Harley-Davidson dealership he and his wife, Jennifer, own.

Students must learn to overcome "the natural tendency to protect the boss from bad things." If they become CEO, he said, they will have to "bypass normal channels and tap into key places to find out what's going on."

And, he added, they will have "to create an environment where people are confident enough to tell the truth."

Crafting fresh approaches to teaching ethics is just beginning. Deans and faculty are meeting with companies that recruit their students, graduates, current students and others.

The new emphasis is on principles, not rules.

"Ethics is a tradition of disciplined thinking. I teach 21-year-olds to think in disciplined ways they haven't thought before," said Gilbert, who holds the professorship LeVan endowed.

"Enrons come and go," Gilbert added. "I don't think a scandals-based approach to teaching works. I want to connect ethics with everyday lives, teach that organizations couldn't operate if people didn't tell the truth and come to the aid of each other."

[verklingen]

i personally think bad business is on its way out. the systems of finance which have engendered such immoral behavior will be molded into a more transparent scheme and be lead by what most befits the prosperity of all parties involved. there will be no such thing as bad deals because doing the right thing is lucrative. businesses rise and fall along with their customers, clients, and, most importantly, workforce. better business practices won't have to be legislated, it's the natural culmination of this capitalist test.

[DubStyle311]

What makes you think that? I gotta tell you, most of what you just described is already in place.

[Ego Tripping]

^ Agreed, it's just that the business practices that are focused on greed and manipulation are still, by and large, the 'norm.'

Originally Posted by verklingen

i personally think bad business is on its way out. the systems of finance which have engendered such immoral behavior will be molded into a more transparent scheme and be lead by what most befits the prosperity of all parties involved. there will be no such thing as bad deals because doing the right thing is lucrative. businesses rise and fall along with their customers, clients, and, most importantly, workforce. better business practices won't have to be legislated, it's the natural culmination of this capitalist test.

[verklingen]

what makes me think that it's happening or what makes me think it's the natural culmination of capitalism? i can very plainly see it happening, and this thread provides further proof that it's actually being impressed upon those who would enter the business world while their career is budding. and that's good news! but i see it as a natural culmination because i understand the idea of a process. it's like evolution. . . there are selective pressures for business and the economy as with anything else. practices which end in failure are rooted out because they are not lucrative, while practices which lead to success are reinforced. it just so happens that ethical business yields success more often than unethical business.

i see it as the same mechanism which governed our evolution and the growth of our capacities: working together is more successful than working alone. working as a group to take down that large animal works better for everyone than individually hunting smaller game. but what if someone thought they'd be clever and kill a rival in the hunt? they might end up losing the game or even dying themselves. time and time again life has proven that when you cheat you're really only cheating your self in the end. "Bad behavior, once found out, will ALWAYS lead to lower stock prices." and it will be found out. you'd just be the most recent in a long line of failures, however successful you might think yourself now.

[DubStyle311]

Hey ET, I remember ages ago you mentioned that you were getting into business for yourself. How has that gone? You seem to have a little bit different perspective on things these days.

[Canuck Wisdom]

Cool thats good to hear. Good post Dub.

[v3d4]

a little cynical voice in me says, oh im sure they are teaching it in schools, but the world is so wicked anyway. people that worship mammon will forget their ethics training in the blink of an eye.

[Center]

I agree with verk for one major reason: accountability. Accountability is something that is becoming ever-more required in our shrinking world. Our societies globalization forces everyone into being more open and empathetic. This doesn't mean that the desire for greed or corruption will ever die out completely, it's just that people engulfed in such things will realise that they musn't continue with corrupt practice because of the likelyhood of being caught. Once your caught with your hands red your reputation is shot. Once your shot in todays world, the scar's gonna be in the limelight, believe it.

[verklingen]

Originally Posted by v3d4

a little cynical voice in me says, oh im sure they are teaching it in schools, but the world is so wicked anyway. people that worship mammon will forget their ethics training in the blink of an eye.

to spring up quickly having no depth of earth, and eventually perish having no root.

center, good to see you!

[Ego Tripping]

Originally Posted by DubStyle311

Hey ET, I remember ages ago you mentioned that you were getting into business for yourself. How has that gone? You seem to have a little bit different perspective on things these days.

Thanks for asking. Things have gone swimmingly, really. I started by marketing myself door to door and had did the standard yellow pages ad. I helped a good amount of people at the beginning and had them post reviews about my company online as well as would always give people extra cards when I left. It's been a little over a year and now I primarily get business by word of mouth and the occasional cold-call from the yellow pages. Already have raised my rates twice, as well. I've been blessed with the opportunity to run the business from my home so my overhead is extremely low, which equates to a nice net profit at the end of each month. I enjoy my business mostly because I work in repairing computers and designing websites (amongst other things) and it feels good to encourage people to re-use their old machines through overhauling it rather than tossing it and buying a new one. It's one of my ways of 'giving back to the Earth', you could say, through my business. I'm working about 60 hours a month and making more than what I used to make working 40 hours a week and I absolutely love the work I do, every day is fun. I've been truly blessed.

My perspective has definitely changed on things, in the respect that I basically gave up buying into the 'Prison Planet' fear mongering as much as I stopped buying into the fear mongering of the Mainstream media as well. I decided to stop assuming I knew what is happening in the world right now, enjoy and make something self-worthy of my life and let the story tell itself. I still believe and recognize a lot of the same things concerning 9/11, the coming/occurring changes happening, the corruption and atrocities happening all around the world, etc.. It's just that instead of being paralyzed by my own mind making assumptions, I chose to be happy now and change the world however I felt I could to fit the world I want to see all around me. I can't change Human Nature in other people, but I can change it in myself and that is really where all changes in consciousness that we've gone through have begun in the first place.

Business and capitalism are essential to the world right now but are just not in check with human rights, wealth distribution, sustainability in terms of the Earth and plain out mindfulness. But as per your other post, I feel that changing everyday and I am glad to be a part of that process by maintaining the same ethics in my business as well as finding new ways to give back to the world as much as I consume from it.

/rant

[Center]

I didn't know any of that, ET. Thats really good to hear. I'm actually getting ready to go into business for myself as well. I'm going to be starting with door to door sales work. I'm still dabling in and out of precisely what kind of company I will eventually open, but for now I'm going to be offering personal financing/accounting help and I'm also going into energy conservation technology. If you have any tips for a newb to the game, get at my PM box or just post up here man!

Verk, good to see ya too! Get at my PM and catch up man...

[Ego Tripping]

Glad you're taking the leap dude. It can be nerve-racking for the first couple of months but once I realized how much freedom I had, it turned into an adventure. My only advice is, maintain integrity and always do your personal best with people. I can't tell you how much residual business comes in from just putting the money secondary to the customer. And 9 out of 10 times, it comes back ten-fold than if I would have just followed the dollar. It's just two ways of gaining status, light vs. dark. I find that if I just help people for the sake of helping them, everything else just falls into place.

[Center]

Yea. For sure.

I'm just starting to word my one sentence mission statement for my buisness. This is my first draft...

-To increase economically and personally the wealth of the world through honest and intelligent business.

I think the wording on this allows for a broad stroke of thought, while at the same time ultimately guiding my startup business in the right direction.

BTW: I'm going to be starting up a webpage within a few months and am looking to hire someone to help me construct the page with me. Maybe we can work out something, ET.

[Ego Tripping]

Definitely dude. Hit me up on email; egotripped@gmail.com and we can discuss it whenever you're ready.

[LetsPlayYourWay]

Hmm looking at the few ethics courses being offered by the top Business schools it is clear why dub loves them. They aren't teaching ethics, rather ways to prevent unethical behaviour from coming to light.